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Soybeans Drop a Second Day as USDA Report May Show Ample Supply

January 8, 2014
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Soybeans fell for a second day in Chicago on speculation a U.S. government report will show ample world supplies as harvests expand from the U.S. to Brazil.

Inventories may total 71.46 million metric tons when the 2013-14 season ends Oct. 1, up 1.2 percent from December’s estimate and 19 percent higher than a year earlier, according to a Bloomberg survey before the U.S. Department of Agriculture updates its forecasts Jan. 10. The survey pegged U.S. production at 3.28 billion bushels, also above the USDA’s earlier estimate. Prospects for Brazil’s crop, forecast by the USDA last month at a record 88 million tons, improved after recent rain, Somar Meteorologia said yesterday.

"Weather conditions in South America are getting better," said Tetsu Emori, a senior fund manager at Astmax Asset Management Inc. in Tokyo. "There is some expectation that inventories for the U.S. and globally will be upgraded in the next USDA report, and this is pushing down the prices."

Soybeans for delivery in March dropped 0.5 percent to $12.695 a bushel at 6:44 a.m. on the Chicago Board of Trade. Futures slid 8.3 percent last year as the USDA predicted record global harvests for the oilseed as well as corn and wheat.

Corn for delivery in March was unchanged at $4.26 a bushel. Global reserves of the grain were seen at 163.08 million tons, more than the forecast of 162.46 million tons in December, Bloomberg’s survey showed.

Wheat for delivery in March climbed 0.6 percent to $6.0625 a bushel. Speculation that record-low temperatures in parts of the U.S. would damage dormant winter crops supported prices. Supplies may still be ample, as Bloomberg’s survey estimated world stockpiles at 182.68 million tons, 3.9 percent more than a year earlier, and pegged U.S. winter planting of the grain at a six-year high.

Milling wheat for delivery in March traded on NYSE Liffe month in Paris was unchanged at 201.75 euros ($274.12) a ton.

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